middle class

(EDITOR’S NOTE, 9/9/18, 6:55 PM ET: This editorial was amended to specify the share of safety net spending for the middle 60 percent of Americans, rather than percentage of Americans using safety net programs.)

A recent paper from the centrist Brookings Institution found that both poor and middle class Americans use the social safety net nearly equally, which begs the question: Is there even an American middle class anymore?

Traditionally, being associated with the American middle class has meant that a household has enough financial stability to be able to provide a family with a decent standard of living without having to depend on public assistance. The actual income level of what it takes to be considered middle class in America varies greatly. A 2017 article in The Washington Post defined a “middle class” income as anything between $42,000/year and $125,000/year, depending on the cost of living in a particular city.

But the findings laid out in the Brookings paper suggest that, if one defines middle class as being able to live comfortably without needing social safety net programs like food stamps and Medicaid, there really isn’t much of a middle class in America anymore.

For the study, Brookings used the definition of middle class adopted by the Future of the Middle Class Initiative (between $37,000/year and $147,000/year) and then combed through data compiled by the Congressional Budget Office to see what percentage of social safety net programs were going toward each income demographic.

Brookings found that while the poorest 20 percent of Americans were responsible for 47.9 percent of safety net spending, the middle 60 percent of Americans were responsible for 46.8 percent of public assistance programs according to 2014 data. The share of safety net spending for middle class Americans was as low as 20.6 percent in 1985.

“To get a sense of the kinds of families we are talking about here, the income thresholds for the second to fifth quintiles in 2014 for a family of three were $36,600, $62,900, $95,200 and $146,700,” Brookings researchers Richard V. Reeves and Christopher Pulliam wrote.

middle class

As CBS News pointed out, the bulk of the reliance on social safety net spending comes from the expansion of Medicaid — the state-funded health insurance program meant to help low-income residents have basic healthcare.

One of the most popular provisions of the Affordable Care Act (Obamacare) allowed for Medicaid to be expanded to Americans who may not live in poverty, but who live just one or two missed paychecks away from it. Eligibility for Medicaid expansion depends on whether or not someone’s income is less than 138 percent of the federal poverty level. However, tax credits are available for those who make too much to qualify for Medicaid but who make less than 400 percent of the federal poverty level.

Given the cost of healthcare in America, it could be argued that these subsidies are still not enough to keep people out of poverty in the event of an unexpected health emergency. Last year, a Federal Reserve survey found that nearly half of the country is unable to cover even just a $400 emergency expense without having to sell something they own or borrow money from someone else.

The Brookings report showing that middle class dependence on social safety net programs started rising steadily over the past several decades coincides with the decline of union membership. Business Insider documented the trend of more and more households falling out of the middle class, while the wealthy saw their incomes increase by significant amounts beginning in 1970. Meanwhile, data from the Bureau of Labor Statistics shows that the percentage of union-affiliated households was cut nearly in half between 1983 and 2015. This data supports the conclusion that the drastic inequality we see today is a direct result of the decades-long campaign of big business to decimate organized labor:

middle class

It may be popular for politicians to care about lifting up the middle class, and for struggling Americans to identify as middle class rather than poor. But the fact that so many Americans are leaning on social safety net programs in order to meet basic needs like food and healthcare means that Americans will eventually have to come to grips with the fact that the American middle class is an endangered species.

If the trend of the very rich accumulating more and more wealth while more Americans have to use social safety nets to provide for their households continues unabated, it’s possible America will become not the land of opportunity, where anyone can achieve the American Dream of financial independence, but a banana republic where everyone but the very rich lives a precarious existence.

 

Leave a Reply

Your email address will not be published. Required fields are marked *